Proposed addition to Brazilian law could make crypto payments legal, protect citizens’s private keys

What 

Federal Deputy Paulo Martins has issued a proposed addition to Brazilian law granting its citizens the right to use cryptocurrency as a means of payment while protecting their private keys from being taken

Why

Should the bill pass, it would expand both the legal uses of cryptocurrency in Brazil and the power the courts would have in confiscating it

What next

The proposed additions are still in the initial phase of discussion which means it could take several years before the additions are passed by the Senate and signed into law

The story

A proposed law would grant Brazilian citizens the right to use cryptocurrency as a means of payment while protecting their private keys from being confiscated by the courts.

Introduced by Federal Deputy Paulo Martins, the proposal if passed would expand both the legal uses of cryptocurrency in Brazil and the powers and limitations of the courts to seize it. 

The proposed addition in Article 835 of the Civil Procedure Code states that while crypto assets, is not a currency in and of itself, it could be “used as a financial asset, means of exchange or payment, or instrument of access to goods and services or investment.”

This doesn’t necessarily mean Bitcoin or other cryptocurrencies would automatically become legal tender, but rather, make legally recognise them as financial assets for investments and other activities.

However, the proposal would not give the court power to seize users’ private keys and does not mention how the court would obtain crypto from self-custodied wallets.

“The following rules will be observed: Access, by the Judiciary, to the users’ private key is prohibited.”

For those that keep their crypto on exchanges, the court would have the power to force “intermediaries” such as exchanges to freeze the debtor’s crypto assets.

While a promising development, the proposed additions are still in the initial phase of discussion in the Chamber of Deputies within the country’s legislature.

This means that it could take several years before the additions are passed by the Senate and signed into law by the president, after which time they may have changed significantly.

To learn more about private keys and cryptocurrencies, visit our learning resource here.

Did you find this useful?
8
2